Drug Prices Outpace Inflation

Price Increases Undermine Medicare Discount Card

The price of name-brand prescription drugs most used by seniors has increased by rates substantially above inflation for the past four years, undercutting the potential value of the new Medicare drug discount card, two senior advocacy groups reported today.

In a study tracking the prices of 197 of the most widely used brand-named drugs from 2000 to 2003, the group AARP found a cumulative increase of 27.6 percent as compared to a general inflation increase of 10.4 percent.

Analyzing the prices of the top 30 name-brand drugs prescribed for seniors, Families USA found an increase on average 4.3 times greater than inflation between January 2003 and January 2004.

The AARP report also found that the price escalation has picked up during the past four years: About one quarter of the most-used name brand drugs more than doubled the general inflation rate in 2000, while 87 percent of those same drugs doubled the inflation rate in 2003.

The Bush administration has estimated that only one in six seniors will actually get the cards.

Sen. Edward Kennedy (D-Mass.) said the new reports show that the discounts cards will be of little use to most seniors. "Seniors need a real break, along with the rest of America, but they won't get one as long as this administration panders to big drug companies that overcharge for their prescription drugs," he said.